Read the articles on Price Discrimination provide: · Borenstein S. and N.L. Rose XXXXXXXXXXCompetition and Price Dispersion in the U.S. Airline Industry, Journal of Political Economy 102(4),...

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Read the articles on Price Discrimination provide: · Borenstein S. and N.L. Rose (1994). Competition and Price Dispersion in the U.S. Airline Industry, Journal of Political Economy 102(4), 653-683. · McAfee, R.P. (2008). Price Discrimination, Chapter 20 in COMPETITION LAW AND POLICY 465 (ABA Section of Antitrust Law 2008) · Stavins, J. (2001). Price Discrimination in the Airline Market: The Effect of Market Concentration, Review of Economics and Statistics 83(1), 200-202. · Steen and Sorgard, Price Discrimination in the Airline Industry, Working Paper, Norwegian School of Economics and Business Administration. Write an essay titled “Is there price discrimination in the US Airline Industry?” In preparing your essay please address the following questions: 1. Which general conditions need to exist in a market for price discrimination to be possible? (use McAfee). 2. How do carriers price discriminate? Mention at least three methods of price discrimination (use Steen and Sorgard). 3. Variation in prices may either be due to price discrimination practices or may simply be a result of variation in costs. Explain how it can be tested whether price dispersion is a result of price discrimination? (use Borenstein and Rose 1994, Section III). 4. What is the relationship between market structure (i.e. level of competition) and price discrimination? (use Stavins 2001) Your response should be typed and between 1 and 2 pages long (single spaced, Arial 11pt font)